My Australian coinciding index

 I haven't updated my Australian coinciding index, which is designed to coincide with the business cycle, for a while now, for a variety of personal reasons, some small, some much larger.  At any rate, I have just updated most of the Australian time series I monitor, and have calculated my coinciding and leading indices.  

I thought I would just confirm that my coinciding index is still correlated with the Ozzie business cycle.  To measure the business cycle, I use an average of real GDP and real GDE (gross domestic expenditure).  For a commodity-based economy, GDE is a better guide to the business cycle than GDP, and is better capable of being influenced by monetary and fiscal policy.

I have expressed both time series (my index and the GDP/GDE average) relative to their moving trend. 

As can be seen, my coinciding index follows the GDP/GDE average closely, though my coinciding index is much further below the GDP/GDE benchmark over the last year than (I suspect) it should be, which may be an artefact of the deviation from moving trend calculation.  [See the second chart below.] Note that neither GDP nor GDE form part of my coinciding index because they are quarterly, and therefore published with a lag.

The MT at the end of the time series is estimated by fitting a OLSQ trend to the data from 01/2018 to 2025, i.e, the last 6.5 years, which have been greatly distorted by the covid crash and the wild rebound from it.  I will investigate whether a slightly longer period for the last few years should be used. [Update: I've tweaked the algorithm, which reduces the deviation below the long-term trend over the last 2 years, but I haven't updated the charts]

Anyway, it seems clear enough that my coinciding index is an accurate estimate of the business cycle.  Expressed as a YoY percentage change, my coinciding index has levelled off, but obviously at a big negative value (hence its continued fall relative to its longer-term moving trend)

Will the Ozzie economy recover from now on?  I suspect it will, but Trump's tariff shilly-shallying isn't just making it harder for business to plan ahead, it's also making it harder for economists to forecast!  All I can do is monitor the data closely, which I will do.  In the meantime, I believe that Australia has passed the lower turning point in the cycle, and although it won't be immune to Trump's idiocies, the recovery will be sustained.